It is easy to ignore tax bills from the IRS and Michigan Department of Treasury, but when the garnished wages, fines, interest charges, and seized assets come upon you, you’ll wish you hadn’t. Lucky for you, the Michigan taxpayer, there is good news after all. The Michigan Offer in Compromise Program took effect in January 2015.
The program, which was signed by Michigan’s Governor, Rick Synder, and sponsored by John Walsh, allows the department of treasury to “forgive taxes on the condition that the taxpayer is unable to pay them or innocent of the faulted amount.”
Michigan is known for its stringent rules regarding back taxes, so to hear they have embraced the offer in compromise (OIC) program is such a relief for many.
Who Qualifies for OIC?
You qualify for the OIC program in the State of Michigan if you are eligible for an offer with IRS in the first place. Having an offer accepted by IRS is prima facie evidence that you are entitled to a compromise from the Michigan Department of Treasury.
The Options on the Table Under OIC
If you qualify to be ‘forgiven” under OIC, you have three options for doing this:
- Doubt as to liability: This means you are sure the taxes have incorrect figures and are willing to provide evidence to back your claim.
- Doubt to collectability: This refers to your inability to pay back taxes in full.
- The IRS approved an offer in compromise: A federal offer in compromise has been granted for a reduced amount for the same tax year(s).
Advantages of the Michigan Offer in Compromise
Over forty other states in the U.S. have already embraced the offer in compromise program, which has great benefits for the taxpayer, including the following:
- It allows taxpayers to open a blank page, as far as taxes are concerned
- Michigan taxpayers can now live peacefully knowing the state will not come after their property. It relieves them from this constant worry and allows them to attain financial freedom.
- It gives taxpayers a chance to have a smooth return to the world of compliance including filing missing tax returns and paying taxes in the future.
- It provides the state an assurance that taxpayers eligible for the program will be willing to pay taxes in the future and correctly file returns.
- Under OIC, Michigan taxpayers are not limited to setting up an installment agreement, as was the case before.
Benefits of Using a Tax Lawyer to Apply for an OIC Program
Sure, you can make the application for an offer by yourself and hope for the best, but you should know that such offers often suffer rejection. In most cases, it is not that the taxpayer is not qualified but because they submitted incorrect or incomplete information.
A good tax lawyer can help you file a complete and accurate offer that will guarantee success each time. In addition, due to the nature of an offer involving negotiations with the taxing entity, a good negotiator should be someone skilled—an expert in the field, like a Detroit tax attorney.
So, does Michigan forgive tax debt? Well, the answer is a resounding YES! Michigan Offer in Compromise is a fantastic way to start afresh. Through the program, you can steer your life in the right direction—buy a car, a house, and get the financial freedom you’ve always desired.